Calling all Locals - What real estate to buy?

[Rpsemont]

And locals includes those own real estate in the greater WDW area. We may be loooking to do a real estate exchange this year and are thinking of buying near WDW. DH"s ideal would be a four plex in a regular residential area - rent three and keep one for ourselves. Hopefully the three would pay the expenses for all four. Another option is a modest two family or single family in a stable neighborhood that we would rent out on an annual basis until we're ready to spend our winters there (probably about 10 years from now) Another option would be to buy one of the homes in the "vacation"developements that would be rented by the week or month. We're really worried about wear and tear with this option though. Any suggestions or experiences or neighborhoods to recommend (or warn against) ?

 

[disneysteve]

Ok, I'm not a local and I don't own WDW-area property either, but I did spend a few months recently delving into the local real estate market intent on purchasing a rental property, so I've done a bunch of the research.

The end result for us was to not buy. We were looking strictly at short-term rentals. I spoke to many owners and property managers and they all agreed. It is extremely difficult to so much as break even on a vacation rental. Those who said they are breaking even or making a small profit all estimated they spend up to 4 hours per day answering e-mails, handling bookings, and doing other property-related tasks. It is a very tough business with loads of competition as there are literally hundreds (actually probably thousands) of short-term rental properties in the area. There is an online forum on the topic at:
http://www.orlando-guide.info/forums/default.asp
Definitely worth checking out that site.

As for long-term rentals, that is an area that I really don't know anything about. Perhaps someone else here can comment on that.

 

[tednvon]

Hello, you are asking very good questions and Steve's answers are very accurate for much of the market.
Right now resales of vacation homes are hot and prices are high.
We purchased a 7bedroom 6 bath home in a prime location last April. It has rented at a about a 35 week a year rate and has turned us about a 20% return on downpayment. But it is in a Prime location at Emerald Isand Resort and is one of the few homes with 6 full bathrooms, so it is in a small market for family reunions and large groups.
This was an investment and we sold it last week for an incredible profit.
The message is that vacation homes are an investment. Investment real estate, especially vacation homes around Disney, is LOCATION, LOCATION, LOCATION.
Feel free to email me if you want to talk more.
There is a always a market for a good 4 plex most anywhere, but if you are not there to run it and manage it, it will cost a lot. If you can live in one and rent the other units, it can be a nice cost effective way to live and the it will appreciate in the Orlando area.
We have had tennants back in Iowa and 90% of the time it is great, 10% nightmare.
You have to want to be a landlord for the 4 plex. For the vacation home you are putting your trust in a management company and they are like Bask and Robbins..they come in all flavors and we have dealt the good, the bad, and the ugly.
If you want a dream vacation home to live in some day, and buy it now, it will rent. If it is enough to cover cost is always an issue.
But it will appreciate around Disney. I am sure Steve can tell you that real estate 8 years ago looked to be at the top of the market and it has gone up over 10% a year. I have no secrets on these board, so to give you our example, we purchased our home in Emerald Island for $320,000 (20%down) April 24. This included some nice upgrades from the base of $295,000. We sold it for $449,000, first answer to our by owner add in England.
This is what is happening to real esate. Our realtor is a great guy who helped with original purchase and will make a nice chuck of this sale. He feels realestate will continue to go up for another 4-5 years.
So I like your enthusiam. Just be careful and look around. If you can live in Orlando and manage your property you are in much better shape to save $$$$ on upkeep.


Good Luck...Ted

 

[Rpsemont]

Thanks for your thoughts. The real estate we're selling is an old New england Victorian chopped into 5 units that we've had just under 10 years. My husband manages 50 or so units for other people so we're well aware of the hassles, time, ect. of owning non vacation rental property. And I know that Location is everything. So if we're not targeting the "vacation" rental area, any thoughts on the "good" neighborhoods? You know, the ones where all the WDW employees live? Somehow, I got the impression that WDW didn't necessarily pay employees enough to can't afford $250,000+ homes.
Disneysteve, thanks for the link. I'll check it out.

 

[tednvon]

Hello. I am not familiar enough with the vast Orlando area to comment on the long term rental market. I know that all I see within 10 miles of Disney is large apartment complexes...My guess is that the 4 to 8 plexes are older and in the more established parts of Kissimmee and St. Cloud. Clermont might be another possibility. Orlando is actually 12 miles north of Disneyworld. My only advice is to find a good realtor who deals with non vacation property.....

good luck....Ted